A company manufactures a product that required three types of material: Material

Question

A company manufactures a product that required three types of material: Material A, Material B, and Material C. The materials are substitutable to some degree and the company does experience some variance in the mix of materials that go into the final product. Information for production for the month of April are provided below. The company produced 10,000 units of output in April DATA FOR MATERIALS USED TO MANUFACTURE COMPANY PRODUCI FOR MONTH OF APRIL Standard Price PerStandard Quantity Per Unit of Output Total Actual Quantity Used Unit of Input MaterialA 45,000 2.00 Material B 35,000 3.00 Material C 30,000 5.00 What is the yiald variance for Material B? Select one O a. $9,000 F b. $9,000 U c $6,000 F d. $6,000 U

Explanation / Answer

Calculation of Yield Variance

Standard quantity for actual Mix

55000

(110000/10*5)

33000

(110000/10*3)

22000

(110000/10*2)

Material Yield Variance (For Material B)

Standars quantity = 10000 Production units * 3 = 30000 units

Material Yield Variance = (Standard Quantity - Standard Quantity for Actual Mix)*Standars Price

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